Portable electronic devices are devices, which are typically carried by a user, for storing and processing electronic information. A common use for portable electronic devices is storing cash value electronically (“electronic cash value information”), which is used in place of hard currency (i.e., cash or coins) to perform a financial transaction such as purchasing goods or services. A common portable electronic device used for purchasing goods and services is an “electronic token,” which stores electronic cash value information. An electronic token is a credit card, debit card, or stand alone card (commonly referred to as a “smart card”) having embedded micro-circuitry to store and process electronic cash value information for performing financial transactions. Because hard currency is represented in electronic form and transactions are performed electronically, the smart card allows a user to carry less hard currency and reduce the need for exact change.
For example, to purchase goods or services at a gasoline station, pay phone, restaurant, supermarket, retail store, convenience store, and etc., a user may insert a smart card (for a contact smart card) into a smart card reader, and the smart card reader makes contact with the smart card. After making contact with the smart card reader, the smart card exchanges electronic cash value information with the smart card reader to perform the transaction.
Alternatively, a user may place the smart card (for a contact-less smart card) in front of the smart card reader, and the smart card exchanges electronic cash value information with the smart card reader by using radio frequency (RF) signals to perform the transaction. If the appropriate electronic cash value information is exchanged, the smart card reader and the smart card perform the transaction for the purchase of goods or services.
A problem associated with using a smart card is security. A smart card with no security procedure improves transaction efficiency, however, if the smart card is lost having no security procedure an unauthorized user may easily use the smart card. A prior security procedure for a smart card is requiring a password or personal identification number (“PIN”). For the password or PIN security procedure, a user inputs a password or PIN that must be authenticated in order for a user to use the smart card to perform a transaction.
A disadvantage with using a password or PIN security procedure is that the password or PIN may be easily copied or retrieved by an unauthorized user. Another disadvantage with using the password or PIN security procedure is that even if the correct password or PIN is used, there is no guarantee that the authorized user is using the smart card.
A more sophisticated security procedure for a smart card is using biometrics such as verbal verification, dynamic handwritten signature recognition, fingerprints, hand geometry, retinal scan, and etc., to verify that an authorized user is using the smart card. Although such biometrics ensures that only an authorized user is using the smart card, such biometrics requires sophisticated hardware and extensive computing power, which increases the cost to implement and maintain such a security procedure. Another disadvantage of using biometrics is that it increases the complexity of using the smart card to perform a transaction.
A disadvantage in using both the password or PIN security procedure and the biometrics security procedure is that such procedures increase the processing time to perform a transaction. For example, the password or PIN security procedure requires time for a user to enter the password or PIN and the biometrics security procedure requires a user to wait for the biometrics to determine if the user is valid before a transaction can be performed.
Another problem associated with using a smart card is recovering information stored in the smart card when it becomes lost, damaged, or destroyed. For example, the password or PIN security procedure and the biometrics security procedure do not address the problem of recovery of electronic cash value information stored in the smart card or guarantees that such information can be retrieved when the smart card is lost, damaged, or destroyed. Without a procedure to recover electronic cash value information in a smart card, a user of a smart card will be wary of storing large amounts of electronic cash value information in the smart card.